Zurich Insurance is contemplating how to get bulk back up in China after dumping subsidiary New China Life five years ago. What are the Swiss insurer’s plans?
Switzerland’s largest insurer has blown hot and cold in Asia and China in recent years. The insurer’s top man in Asia, Jack Howell, has made clear that Zurich is keen to jump back into the mainland China market, a full five years after offloading New China Life.
The remarks represent a pledge to remain in Asia, after reports that Zurich was seeking a partial or full exit. Does Zurich view the 2013 sale as a mistake, then? Not exactly, according to Zurich Chairman Michel Liès.
«If you have an outstanding portfolio, but you can’t establish or deepen contact with your clients, then a sale is an option,» he told Swiss daily «Neue Zuercher Zeitung» (in German, behind paywall).
Drop in Bucket
Zurich has been a quiet acquirer, snapping up Macquarie’s retail life insurance protection arm in Australia, MAA Takaful Berhad, a sharia insurance business in Malaysia, and Cover-More, an Australian travel insurer.
Last year, Zurich posted a more than 42 percent drop in pre-tax profit in property and casualty insurance to $155 million when reserves from previous years fell away. Its life business hiked profit by more than 73 percent to $132 million. For comparison, Zurich’s overall pre-tax profit is $3.8 billion.
While Howell told the «South China Morning Post» in January that Zurich would love to get back into China, Liès said that Asia is more than the economic juggernaut. «China is a key part of our strategy in Asia, but it isn’t the only market we’re looking at.»
Entree via Tie-Up
Liès wasn’t pushed on specifics, but Zurich has more blank spots on the Asian business map than rivals such German insurer Allianz. The Swiss insurer grabbed ANZ’s insurance arm in Australia earlier this year, a move which underscored its determination to grow in the region.
«Of course we want to build up a cooperation in China in order to get closer to clients», Liès said. The insurer is heavily skewed to Europe and North America, but has been slower to expand in hot markets like Latin America or Asia. Zurich would prefer to enter an Asian market via acquisition or distribution tie-up, Liès signaled in the interview.